Washington Editor

Vion Pharmaceuticals Inc.'s stock rose 18 percent Tuesday on news that the FDA lifted a clinical hold on a Phase III trial of the firm's anticancer drug Cloretazine (VNP40101M).

The double-blind, randomized, placebo-controlled study, known as CLI-037, is investigating Cloretazine, an alkylating agent, in combination with the chemotherapy agent cytarabine as a treatment for patients with relapsed acute myelogenous leukemia (AML).

The trial, started in March 2005, was designed to accrue patients in first-relapse AML whose first complete remission was more than three months but less than two years. The primary endpoint is the objective response rate, defined as complete remission plus CRp, a complete remission with incomplete recovery of platelet count. Secondary endpoints include time to progression, duration of response, overall survival and toxicity.

Patients in the study were randomized to receive Cloretazine with cytarabine or cytarabine alone.

The FDA in May put a hold on the trial based on a planned interim evaluation of 210 patients by the trial's data safety monitoring board, which concluded that any advantage of the primary endpoint was being compromised by the mortality observed in the study, CEO Alan Kessman said Tuesday during a conference call. (See BioWorld Today, May 24, 2007.)

But, he said, a comprehensive safety and efficacy analysis conducted by Vion personnel and external and independent medical consultants determined that the combined myelosuppressive effects of Cloretazine and cytarabine given at the dosages and schedules at which they were combined in the trial, in conjunction with the poor hematologic reserve of patients with relapsed AML, were major factors in the difference in mortality seen between the two arms of the study.

A review of records from patients who died did not suggest any previously unreported toxicity for Cloretazine or cytarabine, Kessman told investors and analysts.

"There was an increase in the response rate observed on the Cloretazine and cytarabine arm of the trial relative to the cytarabine and placebo arm, despite the difference in deaths between the two arms," he explained. "Given this observed increase in response rate, our AML program experience and opinion leader support, we have proposed a trial amendment to continue the study of Cloretazine in the relapsed setting."

Vion has reached an agreement with the FDA to modify the Phase III study to include a lower dose of Cloretazine in the experimental arm of the trial and prophylactic therapy with antibiotics, antifungals and growth factors for all patients, Kessman said.

Before the firm can recommence the trial, which was being conducted under an FDA special protocol assessment, Vion must submit an SPA to the FDA with the agreed on modifications, he added.

Kessman noted that the company's clinical plan for Cloretazine includes a monotherapy approach based on two Phase II studies, including a pivotal Phase II in elderly patients with de novo, poor-risk AML.

Preliminary data from the Phase II trial of Cloretazine in elderly patients with de novo, poor-risk AML have indicated that the compound met the criteria for success based on the primary endpoint, the overall response rate, he explained.

"We reported a response rate of 35 percent for the patients in the trial," Kessman said, noting that the study was conducted in "a group of patients who were elderly and had several risk factors making them poor candidates for treatment and response."

While a study in the first-relapsed AML population is important to Vion to expand the labeling for Cloretazine, Kessman said, "our first priority in 2008 is to work toward our registration based on our Phase II programs in elderly patients with de novo, poor-risk AML. Our efforts are focused on filing with the FDA later this year and further clinical plans to advance the possibility for broad utility in the treatment of AML as both a single agent and in combination with other therapeutics in both elderly patients and younger patients and in both front-line AML and relapsed AML."

Cloretazine also is being investigated as a single agent in patients with small-cell lung cancer and in combination with temozolomide to treat brain tumors, Kessman noted, adding that the compound is being studied with stem cell transplantation in advanced hematologic malignancies at the M.D. Anderson Cancer Center in Houston.

Vion's operating plan has available funding to start an additional Phase III trial of Cloretazine in late 2008, he maintained.

"With our cash position at the beginning of 2008 at about $60 million, we have enough cash to last through the third quarter of 2009 based on our current operating plan," Kessman assured investors. "At that time, we would hope to know if Cloretazine is approved for commercialization."

He noted that Vion recently filed a proxy statement with the Securities and Exchange Commission for a special shareholders meeting to vote on a potential reverse split.

"Our stock price has been below $1 per share, and we have a deadline of March 17 to regain compliance with the $1 bid price requirement of Nasdaq," Kessman acknowledged. "Maintaining our listing is important. Although no definitive decision has been made with regard to reverse split, we would like this option for our board of directors, should it be deemed necessary."

While shares of Vion (NASDAQ:VION) were up 10 cents Tuesday, the stock remained below $1, closing at 67 cents.